After it was revealed that the company's $30-per-month unlimited data plan will be the only option for iPhone 4 users on Verizon, the carrier's chief operating officer said that the company still intends to phase out its unlimited plan and moved to a tiered pricing structure in the future.

Speaking with The Wall Street Journal on Tuesday, Verizon COO Lowell McAdam said the unlimited data plan for the iPhone 4 will be temporary. He revealed that his company intends to follow in rival AT&T's footsteps and adopt a tiered pricing structure.

Though McAdam did not indicate when Verizon might adopt tiered data plans, the report indicated that the change will occur in "the not too distant future."

It was last June that AT&T stopped offering its unlimited 3G data plan to new customers. Now, AT&T offers 2GB of data for $25 per month, or 200MB for $15 per month.

For now, Verizon customers who buy the iPhone 4, set to debut on Feb. 10, will only have the option of the carrier's $30-per-month unlimited plan. Unlike AT&T, Verizon will not offer a less expensive plan. But unlike Verizon, AT&T does not have an unlimited option for new customers.

Verizon customers who want to get an unlimited plan should act quickly when the iPhone 4 arrives to secure the $30-per-month limited-time offer for at least the two-year-term of a new contract.

McAdam indicated that not offering an unlimited plan for the launch of the iPhone 4 would create a barrier for customers who might otherwise switch from AT&T. "I'm not going to shoot myself in the foot," he said.

The COO also said that he feels anticipation for the arrival of the iPhone on his network held back smartphone sales in the fourth quarter of 2010. Prior to the announcement earlier this month, rumors persisted throughout the second half of 2010 that Verizon would get the iPhone in early 2011.

they are probably doing this to attract those iphone customers on AT&T who have the unlimited plans since they were grandfathered with the change happen at AT&T. They will probably keep it in place until the see the migration of AT&T customers dropping.

And this is how collusion works in the wireless industry. Companies use the press to signal their intent and to make sure they don't start actually competing on price. Translation, "We're going to offer an unlimited plan at first to steal a few of your customers, but don't worry, AT&T, you just keep that cap on yours and we'll be joining you shortly. Let's not do anything stupid."

And this is how collusion works in the wireless industry. Companies use the press to signal their intent and to make sure they don't start actually competing on price. Translation, "We're going to offer an unlimited plan at first to steal a few of your customers, but don't worry, AT&T, you just keep that cap on yours and we'll be joining you shortly. Let's not do anything stupid."

And this is how collusion works in the wireless industry. Companies use the press to signal their intent and to make sure they don't start actually competing on price. Translation, "We're going to offer an unlimited plan at first to steal a few of your customers, but don't worry, AT&T, you just keep that cap on yours and we'll be joining you shortly. Let's not do anything stupid."

Collusion is an agreement between two or more persons, sometimes illegal and therefore secretive, to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair advantage.[citation needed] It is an agreement among firms to divide the market, set prices, or limit production.[1] It can involve "wage fixing, kickbacks, or misrepresenting the independence of the relationship between the colluding parties".

Not "legally", but it certainly is. They all understand the specifics of the law and exactly what constitutes "collusion" under the law. They all also understand the basics of game theory and that they will maximize profits over the long run if no one "cheats", but everyone maintains the status quo. And they all most definitely understand that the best, safest way to signal their competitors about what they are doing is through the press. These statements aren't directed at consumers, they are directed at their fellow CEOs in the wireless industry.

I see it more as them plugging the gap ATT left when they did away with their unlimited pricing plans, some people really do want that. Plus if everyone has to have it then they gonna line their pockets for a while until they come out with the tiered structure and give people a break. They will lose some sales but since they have to subsidize the phone so much it's probably more profitable to do it this way. I have another 10 months on my ATT contract and I'm reducing my unlimited plan which I should have done a long time ago, I don't think I've ever been over 200mb in reality, I've only checked twice and I was well under on normal usage months, so I've been wasting $15 a month since they introduced the tiered plans. most people probably have and we all gotta look where our money is going these days.

I see it more as them plugging the gap ATT left when they did away with their unlimited pricing plans, some people really do want that. Plus if everyone has to have it then they gonna line their pockets for a while until they come out with the tiered structure and give people a break. They will lose some sales but since they have to subsidize the phone so much it's probably more profitable to do it this way. I have another 10 months on my ATT contract and I'm reducing my unlimited plan which I should have done a long time ago, I don't think I've ever been over 200mb in reality, I've only checked twice and I was well under on normal usage months, so I've been wasting $15 a month since they introduced the tiered plans. most people probably have and we all gotta look where our money is going these days.

Its actually just there to poach the grandfathered unlimited users from ATT for a bit, and just like someone abve said, they are pre-announcing that it is limited time only in a direct effort to ease ATT's fingers off the trigger of offering them again.

I see it more as them plugging the gap ATT left when they did away with their unlimited pricing plans, some people really do want that. Plus if everyone has to have it then they gonna line their pockets for a while until they come out with the tiered structure and give people a break. They will lose some sales but since they have to subsidize the phone so much it's probably more profitable to do it this way. I have another 10 months on my ATT contract and I'm reducing my unlimited plan which I should have done a long time ago, I don't think I've ever been over 200mb in reality, I've only checked twice and I was well under on normal usage months, so I've been wasting $15 a month since they introduced the tiered plans. most people probably have and we all gotta look where our money is going these days.

I don't know how anyone can get by on 200-250 mb of data a month.

I guess if you don't surf the web for more than 2 minutes a day and don't check email more than twice a day and then don't download any attachments. Sure does not male for a smart smart phone.

yeah, not collusion in any way and yes companies send signal like this all the time to one another so pricing wars and such do not happen.

Collusion happens behind close doors and both companies agree to do things such that they both get what they want at the expense of the consumer.

The dictionary says nothing about a closed door requirement. It can be illegal or secret. I guess neither really fit, but it is sorta secret in the way gangster hand signals are.

Definition from the Apple dictionary app: "Secret or illegal cooperation or conspiracy, esp. in order to cheat or deceive others."

This is pretty common with raw materials or utility competition between a small number of players. Kinda like chess. I got you in check, so I can force your move. That doesn't really work when you have 100 people playing the same game of chess. Two ways to compete. You either provide better services or you play these price/services games to try to divide up the market.

At least the consumer gets some benefit if they are lucky. If they feel they have enough bandwidth to make high-bandwidth customers worth their while they will switch back to unlimited. Capitalism can still work here. There are disadvantages to everything. In the ideal situation, there can only be three outcomes. Divide up the market while still providing decent level of service, race to the bottom while continually offering worse service, or offer the best possible service at a high price. AT&T and Verizon are dividing up the market. The other providers are pretty much in a race to the bottom.

It is open collusion. The dictionary says nothing about a closed door requirement.

Definition from the Apple dictionary app: "Secret or illegal cooperation or conspiracy, esp. in order to cheat or deceive others."

There is no such thing as 'open collusion'.

Quote:

col·lu·sion
[kuh-loo-zhuhn]
–noun
1. a secret agreement, esp. for fraudulent or treacherous purposes; conspiracy: Some of his employees were acting in collusion to rob him.

2. Law . a secret understanding between two or more persons to gain something illegally, to defraud another of his or her rights, or to appear as adversaries though in agreement: collusion of husband and wife to obtain a divorce.

Sounds like a good way to gauge usage on a new device without taking a hit to the bottom line while they figure out competitive usage based pricing. T started it out this way.

It's my opinion that the iPhone introduces many new demographics to the smartphone business. I would have never bought smartphones for late 60s early 70s parents if it wasn't for the iPhone. They are still on the original T unlimited plan and use them to stream quite a bit.

This is no more collusion among wireless data plan prices than pricing behavior that exists in the airline or automotive industries, where there are a few, mutually interdependent competitors that sell products that are either identical or minimally differentiated. The economic description of this condition is "homogenous oligopoly." Those who are capable of understanding the pricing implications might read the following.

Sure the collusion isn't open in the sense that they aren't saying, "Hey, I'm making this statement to you, the press, in order to signal AT&T that we're going back to tiered pricing right after this iPhone launch thing, so that they don't panic and start a price war with us." However, that doesn't mean it isn't collusion, they are simply passing signals in the open, so as to avoid the legal definition of collusion. They all understand the game and how it's played, and they are absolutely playing it to avoid a situation where their profits suffer because they have to compete on price for services offered. The effect is exactly the same as if they secretly flew to Vegas and held meetings to discuss it, and they know exactly what they are doing without having to do that.

I guess if you don't surf the web for more than 2 minutes a day and don't check email more than twice a day and then don't download any attachments. Sure does not male for a smart smart phone.

Oh, and don't even thing about streaming even one bit of data.

Streaming content certainly takes it's toll, but the biggest data hog is app downloads. Reset your counters at the beginning of the month and do not download any apps over 3G, I think you'll find your usage will go way down. Also, don't run background apps that access internet all the time.

Services like Netflix & Pandora will certainly eat up data but personally I don't think it's all that unfair for AT&T to ask heavy data streamers to pay more for their data service, certainly more fair than them asking me to pay more for my data to cover your usage. I also love that overages no longer kick in automatically & they don't cost you an arm & a leg!

The more I find out about Verizon's plan the more I see no reason to switch. If the 5 device wifi tethering is coming to both with 4.3 then I truly have no reason to switch, I much like simultaneous voice & data.

This is no more collusion among wireless data plan prices than pricing behavior that exists in the airline or automotive industries, where there are a few, mutually interdependent competitors that sell products that are either identical or minimally differentiated. The economic description of this condition is "homogenous oligopoly." Those who are capable of understanding the pricing implications might read the following.

Streaming content certainly takes it's toll, but the biggest data hog is app downloads. Reset your counters at the beginning of the month and do not download any apps over 3G, I think you'll find your usage will go way down. Also, don't run background apps that access internet all the time.

Services like Netflix & Pandora will certainly eat up data but personally I don't think it's all that unfair for AT&T to ask heavy data streamers to pay more for their data service, certainly more fair than them asking me to pay more for my data to cover your usage. I also love that overages no longer kick in automatically & they don't cost you an arm & a leg!

The more I find out about Verizon's plan the more I see no reason to switch. If the 5 device wifi tethering is coming to both with 4.3 then I truly have no reason to switch, I much like simultaneous voice & data.

Exactly.

Youtube, Pandora to some extend, and especially downloading apps and music.

If you just mind your usage of these couple things, most people EASILY use less than 200mb outside of wifi access.

I guess if you don't surf the web for more than 2 minutes a day and don't check email more than twice a day and then don't download any attachments. Sure does not male for a smart smart phone.

Oh, and don't even thing about streaming even one bit of data.

Usually i'm on wifi, that seems to be the case for most people. 3G is so damn slow anyway. I'm half way through my billing cycle and I used 7.8mb so far, my counters show 270mb up and 1.3GB down in 14 months of usage. Doh..... gonna change this immediately...

they are probably doing this to attract those iphone customers on AT&T who have the unlimited plans since they were grandfathered with the change happen at AT&T. They will probably keep it in place until the see the migration of AT&T customers dropping.

Kind of smart in their part...

Maybe, but there is nothing that would make AT&T happier than to see the top 1% of data hogs all move over to Verizon. I am not sure Verizon would be all that happy to have them either. For it to be "smart" on their part, it will need to attract the AT&T customers who have unlimited data plans and want to keep them, but who dont actually use much data.

Perhaps these are just two companies doing business - If you make widgets I'm sure you would not like to sell your widgets for 7¢ - There is nothing criminal about a business trying to protect a healthy profit margin - If you don't like it you can always go to another business offering a better deal if there is one (if that does not exist maybe you expect too much?) - Perhaps anyone out there that wants unlimited data for 7¢ per month should start their own carrier . . .

Maybe, but there is nothing that would make AT&T happier than to see the top 1% of data hogs all move over to Verizon. I am not sure Verizon would be all that happy to have them either. For it to be "smart" on their part, it will need to attract the AT&T customers who have unlimited data plans and want to keep them, but who dont actually use much data.

I think there are alot more of those than many would think, hell I was one of them before 2 months ago.

And this is how collusion works in the wireless industry. Companies use the press to signal their intent and to make sure they don't start actually competing on price. Translation, "We're going to offer an unlimited plan at first to steal a few of your customers, but don't worry, AT&T, you just keep that cap on yours and we'll be joining you shortly. Let's not do anything stupid."

Interesting hypothesis. So as a consumer who has the grandfathered unlimited data I should go to AT&T and ask for unlimited txt at no extra charge and whatever else I can think, or threaten to leave for Verizon.

Also I would imagine everyone who does have unlimited data with AT&T would also have another year on their contract since they just got their iP4.

This is more great news for Big Red customers. Now you have no excuse not to purchase the world's most popular smartphone and of course you will be able to easily upgrade to the iPhone 5 Superphone this summer you can be sure.

I would invite all 93+ million customers of Verizon to seriously consider the many benefits of owning the 4 today and next month be ready to pounce on that order and pull the trigger. You can thank me later.

Bus Driver out.

CONSIDER YOURSELF SCHOOLED !
BTW, THEY CALL ME THE BUS DRIVER BECAUSE I TAKE EVERYONE TO SCHOOL. ABSOLUTELY NO CHARGE FOR THIS LESSON AS I CONSIDER IT A PUBLIC SERVICE.

This is more great news for Big Red customers. Now you have no excuse not to purchase the world's most popular smartphone and of course you will be able to easily upgrade to the iPhone 5 Superphone this summer you can be sure. ...

Interesting hypothesis. So as a consumer who has the grandfathered unlimited data I should go to AT&T and ask for unlimited txt at no extra charge and whatever else I can think, or threaten to leave for Verizon.

Well, I'm not sure it has anything to do with my post, but it might be interesting to see what sort of customer retention policy AT&T comes up with, if any.

Quote:

Originally Posted by mstone

Also I would imagine everyone who does have unlimited data with AT&T would also have another year on their contract since they just got their iP4.

For instance, a 5GB cap would be more than reasonable for the iPhone. 2GB is a bit too stifling. I managed to use over 400MB on a Thursday to Monday stretch while on a trip, and that was with NO tethering. Just lots of web browsing, google maps, Pandora, and so on.

The idea of a cap should be to prevent abuse, not to swindle people out of more money. Smartphone plans are ALREADY expensive. Look at what you can buy for $90!

So yeah, caps are fine. But make them reasonable. And if you charge for tethering, up the cap to compensate, damnit. Paying more to use the same bits in a different way is just stupid.

msantti, how do you track your usage if you have an unlimited plan? I have ATT's Unlimited for my iPad and I've never found a way to track my data consumption.

Can't speak for the iPad, but you can find this info on the AT&T website after logging in and going to your billing section. Can't remember exactly where it is now, but you can go month-by-month and look at historical usage info.

Quote:

Originally Posted by msantti

I don't know how anyone can get by on 200-250 mb of data a month.

I guess if you don't surf the web for more than 2 minutes a day and don't check email more than twice a day and then don't download any attachments. Sure does not male for a smart smart phone.

Oh, and don't even thing about streaming even one bit of data.

Gotta wonder what you're streaming then. Granted I've not been streaming video, but I'm almost always streaming Pandora and Last.fm in the car and in my heaviest month I used 700mb. I'd never drop down to the 200mb plan, but my personal experience shows that most of us could easily get by with the 2gb plan.

Frankly I don't think an unlimited data plan should be a major factor when deciding to jump carriers.